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Economists back Alistair Darling's 'sensible' spending
19 Feb 2010
Alistair Darling today won the support of more than 60 leading economists over his decision to delay spending cuts.
The group said in two letters to the Financial Times that it would be “positively dangerous” to slash public spending and would risk Britain's economic recovery.
The letters are a direct riposte to one that 20 economists sent to the Sunday Times urging more rapid action to tackle Britain's £178 billion deficit.
Lord Skidelsky, a cross-bench peer and biographer of the economist John Maynard Keynes, organised one letter and accused the Sunday Times authors of trying to frighten the public over the scale of the deficit.
“For the good of the British public - and for fiscal sustainability - the first priority must be to restore robust economic growth,” his letter says. “How do the [Sunday Times] letter's signatories imagine foreign creditors will react if implementing fierce spending cuts tips the economy back into recession?”
The other of today's letters, organised by Lord Layard, emeritus professor of economics at the London School of Economics, commends the Chancellor's “sensible” plan for reducing the deficit.
“While unemployment is still high, it would be dangerous to reduce the Government's contribution to aggregate demand beyond the cuts already planned for 2010-11,” it says.
The signatories to the letters include two Nobel laureates - Joseph Stiglitz and Robert Solow - and five former members of the Bank of England's monetary policy committee, including former deputy governors Sir Andrew Large and Rachel Lomax.
A spokesman for Mr Darling said the letters destroyed shadow chancellor George Osborne's claim that there was a consensus among economists on the need for early action to tackle the deficit.
Reader views (22)
Interesting that the international investment world has such faith in brown and labour that the £ continues to crash. It is now lower against every major currency than it was in 1997. Some comment on labour. And, by the way, brown, thankyou for devaluing my life savings by some 25%. (And yet there are still fools who will vote for this megalomaniac)
- John Bell, Nottm, UK, 20/02/2010 17:51
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can we have a full list of this 60 strong group so we can weed out the power suckers money suckers and family friends
just so when it all comes crashing down we know who to ridicule in public..... Like so many of this anti British pro EU state bunch of groveling party's past lies and
cultural destructors.
- Terry, british, 20/02/2010 10:10
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I seem to remember 67 Economists advising Margaret Thatcher not to make cuts and raise taxes in the Labour inspired recession of the early 80's. We all know what happened after that - loadsamoney era! So do we heed their successors advice or get stuck into sorting out our third world economy and tackle our debt?
- Jon Frederics, London, 19/02/2010 20:52
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All I hear as a solution to this economic problem is to "spend our way out of it".
Spend what on what?
Where does the money come from and what is it being spent on? Not our steel industry, I see.
- Alan, uk, 19/02/2010 20:34
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bloody idiots. don,t spend what you have not got!!!
- Andy, brittany fr, 19/02/2010 20:19
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Funny how everyone who was appointed by Gordoom onto the supposedly neutral Monetary Committee happens to agree with printing more money to pay for Gordoom's fantasy economy where public servants and welfare jockeys outnumber private workers.
- Jamal Akhbar, Edinburgh, 19/02/2010 18:00
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No doubt these knowledeable fellows forecast the recession.
- Alan, Llandrindod Wells Wales, 19/02/2010 15:07
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How ironic that the dons' wisdom comes on the day when we hear of the biggest ever public expenditure deficit in the month of January ( a deficit which, if extrapolated, would exceed Greece's) and when the pound strikes rock bottom against the dollar. Are these clever pundits the same self economists who predicted the end of boom and bust? perhaps what we witness is the death of economics as a reliable science. But then, was it ever a science?
- Maggie, Crouch End, 19/02/2010 14:57
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Re Ray Crampton's question...Obviously not. I mentioned the past, to illustrate how times have changed and indeed how times are changing.
This is not an occasional recession...It is much more and it is global.
Economists can and will argue with each other endlessly, but none of them have come up with a realistic solution to the present situation as far as I can see.
What is required is not economic clap trap, but something far more intelligent.
We should be searching for answers, not from economists, but philosophers, historians, scientists and the ilk.
Economists got us here in the first place, and we are asking them for solutions!!!
- Coplani, Inverurie U.K., 19/02/2010 14:11
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No need to introduce cuts. Just freeze all pay in government [in fact 10% cuts across the board]. Freeze all hiring in government. Watch the immediate reduction in spending on dead wood.
- James Macleod Ritchie, Oyster Bay Cove, 19/02/2010 14:05
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Reading these comments is more fun than reading the articles.
Ken, London. Would we have listened? some economists did tell us.
The biggest problem that I can see with capitalism is that there is no other viable alternative,
Coplani, Inverurie. Would you like to go back to the days of making a pittance and working all hours for the upper classes, or just put up with the occasional recession?
- Ray Crampton, Fairfax CA USA, 19/02/2010 13:38
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How can we have any faith in what economists believe. They didn't warn us of the dangers before the recession, in fact they were supporting the model that crashed and burned. Now they are arguing over future strategy, bizarre.
- Ken, london uk, 19/02/2010 13:12
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Are these the same economists the Labour Party have organised to put a positive spin, on the worse post World War deficit record? The man with the knowledge and experience is Dr Vincent Cable MP the LibDem.
- Andrew, London, 19/02/2010 12:49
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Too many people sitting on their backsides and not producing anything....too many sitters and not enough doers...
Go back a generation to find real workers.
Then there were workers getting paid a pittance, but producing a lot, including agriculture.
Now we have millions of people sitting in front of computer screens getting paid quite a lot...especially investment bankers, and you don't need a lot of intelligence or skills to do that....Kids nowadays could do what most of these parasites are doing.
The rise of beaurocracy and cities...priviledged masses.
What we need is some far sighted intelligent people to guide us through this unprecedented collapse of the fabric of our economic structure, caused by above.
Nothing stands still...that is universal. However adapting to change is necessary to survive.
I do not see any adapting to the changing economic world we live in. It seems that all the government can do is to ensure that the status quo remains.
We seem to be in an economic trench and sitting tight, hoping that the crisis will resolve itself. Meanwhile the weakest and remotest from the City are being sacrificed, including our children's future prosperity.
All the politicians can argue about are the usual left versus right.Friedman v Keynesian economics....Freeforall or Social welfare for all...Times they are a changing, that is for sure.
- Coplani, Inverurie U.K., 19/02/2010 12:42
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The london school of economics support labour. What a surprise. It's a shame it will not be deciding britain's future.More importantly, what does pimco or the other bond dealers who hold our fate in their hands think of labour's economic handling of the ecomomy. So far they are either silent or decidedly negative.
- G Brown, london, 19/02/2010 12:27
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These economists (like Stiglitz) are Keynesians, so they naturally believe in spending your way out of a recession. What they fail to appreciate is that Brown was spending all the money in the boom times (very UN-Keynesian) so there is no surplus for supporting the economy. They have been misdirected by Mandelson no doubt.
- Nickspurs, London, 19/02/2010 12:17
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I think the case he is holding is full of shreded paper
It can't hold anything else.
- Richard Edmunds, Rayleigh UK, 19/02/2010 12:03
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#D.Miner
You may well think that. We are just coming out of the worst recession since the second world war. However, I am inclined to place more credence on the recommendations of a Nobel Laureate, and others of his ilk, who back the government's action to restore the economy before cutting government support, than I am to accept the self-serving views of past and present Conservative donors and ministers.
- Val Daniels, Mijas Costa, Spain, 19/02/2010 11:59
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Unemployment is going to remain high for many years to come. So do these economists, who support NuLabour, recommend that we go on borrowing billions and billions ad infinitum? We just need to wake up and smell the coffee and get real. We have a vast amount of debt that needs paying off now. We cannot keep on borrowing just to subsidise this phoney, "feel good factor," promoted by NuLabour.
- Brian G, Norfolk Gorleston, 19/02/2010 11:53
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These sixty economists are not doctors, so there is no point in giving the kiss of life to a corpse!
- James From Camden, London, 19/02/2010 11:24
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Darling may as well keep his make up in that briefcase.
- John Smith, London. UK, 19/02/2010 10:01
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George Osborne is a rookie when it comes to the economy. Not sure if that is enough to convince me not to vote for the Tories the next time though. Labour have had 12 years to get it right and I feel we we have taken 2 steps forward, and 3 backwards with New Labour.
- D. Miner, London, UK, 19/02/2010 09:44
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